South Dakota Auto Dealer Bond— $25,000 Continuous -- No Expiration Date, 30-Day Cancellation Notice

A continuous bond has no fixed expiration date. Once your South Dakota dealer bond is filed with the Department of Revenue, it remains active indefinitely as long as annual premium payments are made on time. You never need to refile the bond at license renewal -- unlike annual or biennial states where the bond form must be resubmitted. The bond only terminates if the surety issues a formal 30-day cancellation notice to both the Department of Revenue and the dealer. Ohio and Nevada also use continuous bonds, but South Dakota's is the only one with a tiered amount structure.

If you or your surety company needs to cancel the bond, written notice must be mailed to both the Department of Revenue (Motor Vehicle Division) and the dealer. Cancellation becomes effective 30 days after the mailing date -- not the receipt date. During that 30-day window, you must obtain a replacement bond or your dealer license will be suspended. We always notify you before any cancellation is initiated and help arrange replacement coverage if needed.

South Dakota auto dealer bonds ($25,000 for new vehicle dealers) cost $125-$2,500 annually depending on credit. Excellent credit (750+) qualifies for $125-$500 per year (0.5-2%). Good credit (680-749) runs $500-$1,250 (2-5%). Fair credit ranges $1,250-$1,875 (5-7.5%). Motorcycle, trailer, and boat dealers have lower bond amounts ($5,000-$10,000), so premiums are even lower.

South Dakota has a tiered bond structure: $25,000 for new vehicle dealers, $20,000 for used vehicle dealers, $10,000 for motorcycle dealers, and $5,000 for trailer and boat dealers. The specific amount depends on your dealer license category. Contact the Motor Vehicle Division at the Department of Revenue to confirm which amount applies before applying.

No. That is the key advantage of South Dakota's continuous bond structure. The statute explicitly states that "any dealer renewing his South Dakota dealer license, and who has already filed such surety bond with the department, need not file any further bond." You only need to refile if your dealership name changes or you obtain a new bond from a different surety company.

Under SDCL 32-6B-7, anyone who sells more than 5 vehicles in a 12-month period must obtain a motor vehicle dealer license and the accompanying surety bond. All businesses must become licensed with the Motor Vehicle Division before any sales transactions occur. Application is through your local Motor Vehicle Dealer Agent using Form 1400.

South Dakota requires $300,000 minimum public liability insurance for vehicle dealers, used vehicle dealers, and motorcycle dealers. However, trailer dealers, snowmobile dealers, mobile home dealers, and boat dealers are exempt from this insurance requirement. The surety bond requirement applies to all dealer types regardless of insurance exemptions.

Yes. South Dakota's $25,000 maximum bond amount is among the lowest in the country, which makes approval easier for all credit levels. Even applicants with credit scores below 600 can typically secure approval. The lower bond amounts for motorcycle ($10,000) and trailer/boat ($5,000) dealers make premiums especially affordable for those categories.

Any person who suffers a financial loss due to dealer fraud, misrepresentation, or violation of SDCL Chapter 32-6B can file a claim against your bond. The surety investigates and, if valid, pays up to the bond amount. You must then reimburse the surety in full plus investigation and legal costs. Maintaining compliance with South Dakota motor vehicle laws is the best prevention.